The Loonie keeps the positive momentum

Daily Currency Update

It is known that President Trump likes to use tariffs to negotiate and Mexico's Peso was under severe pressure last week along with a proposed U.S. levy on Mexican exports. However, after the FX market close on Friday, President Trump tweeted, "I am pleased to inform you that The United States of America has reached a signed agreement with Mexico…" It is too early to tell whether the agreement reached Friday evening will lead to the lifting of the tariff threat in the future. However, the Loonie is realizing the benefits from Trump's decision of calling off planned tariffs, which were very welcomed by Republicans and others who advised that the tariffs would damage the U.S economy, slow job growth, and interrupt a trade deal between Canada, the U.S. and Mexico, known as the USMCA, which still needs lawmaker ratification.

Technically speaking, the USD/CAD pair is oversold, last Friday, it was trading above its 200 moving average, representing an approximated rate of 1.3265. However, at the time of this writing, it is trading ten pips below it, at 1.3255. It is too early to say whether it will continue to fall despite that it has broken an uptrend support. However, in the longer term, if this breakout materializes, the USD/CAD might try to test 1.3120. For today, two crucial supports are 1.3240 and 1.3192. On the flip side, two resistance levels are 1.3288 and 1.3364 and some less critical resistance levels are 1.3315 and 1.3338.

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